Noida apparel units fall to 1,800 from 2,400 as US orders dry up

Noida's garment export cluster is down to about 1,800 working units from 2,400 six months ago. In Surat, diamond factories have extended their Diwali shutdown to 25 days from 15, as US orders thin and tariff talks drag¹.

The Noida Apparel Exporter Cluster expects the city's apparel exports to fall to about Rs 42,000 crore this financial year from Rs 48,000 crore in 2025-26, its president Lalit Thakrul said¹. He put employment at about 800,000, down from around one million¹. "Unless the India-US bilateral trade agreement is in place, there is no chance of reopening of the units," he said¹.

These are association estimates, not official data, from a report datelined Kolkata that rests on the Noida cluster and the Diamond Workers Union, Gujarat. Neither count has independent confirmation.

The 10% levy is real. The final rate is not.

Since July 2026, Indian goods have carried an extra 10% US duty under Section 301, tied to forced-labour enforcement^2, 3.

Washington wants to retain the 18% rate envisaged in the February framework, sources told BusinessLine³. New Delhi will not accept more than the current 10% and is inclined to wait until after the US mid-term elections, those sources said³. Piyush Goyal said on 26 October that most talks are done and the text is being fine-tuned⁶.

A deal may not mean relief. At 18% the duty would be higher than the 10% exporters pay now³. India also wants any added penalty, including from a Section 301 excess-capacity probe, to keep its total below the duties Vietnam, Bangladesh and Indonesia face³.

Demand is cautious, not collapsing

The US National Retail Federation expects holiday sales in November and December to rise 4.2% over 2025⁷. But US consumer sentiment sits at a five-month low and is 10% below its level a year earlier, and buying conditions for durable goods fell 18%⁸.

India's textile shipments to the US fell about 7% in FY2026, although the US still took 31% of India's textile exports². In Noida, the damage runs through timing. Kapil Sadh of SK Overseas said uncertainty hurts more than the duty, because buyers delay and fabric bought for those orders becomes stranded¹. "An exporter can retain an order and still lose money," he said¹.

For a buyer, the split matters. If it is demand, there is room on price. If it is the duty, the change sits in landed cost, and relocation is the real lever.

What the numbers do not show

The report does not break Noida's losses down by product, so there is no woven versus knit or cut-make versus full-package split¹.

In Surat the closures are small units¹. Its cutting and polishing base runs from firms with several thousand workers to informal workshops with a handful⁹. In the 2008 downturn, small and medium units shut while big ones kept their staff⁹. About 90% of the world's diamonds are cut and polished there⁴.

Gem and jewellery exports still grew 13% to $14.30 billion in April to September, led by studded gold jewellery, silver jewellery and polished lab-grown diamonds⁵. That is how headline exports rise while small natural-diamond units close. Kama Jewelry's Colin Shah said US Christmas demand has been very good¹⁰. The report gives no reason for the soft Chinese orders it describes¹.

Costs rise as volumes fall

Cotton yarn cost about 60% more in September 2026 than in early 2026, at Rs 400 a kg against Rs 250². India waived its 11% cotton import duty from 1 June to 31 October and is expected to extend it to December¹¹.

Big exporters are reweighting. Tiruppur's Royal Classic Mills cut its US share from 85% to 40% in 15 months¹⁰. Raymond Lifestyle plans to cut its US export share from 65% to 55 to 60% in two years². India's textile exports still rose 10.3% year on year in April to August 2026, after a 2.7% fall in FY2026².

Who picks up the US business is not measured here. A Noida exporter named Bangladesh, Vietnam, Indonesia and Cambodia as the hubs that could take the buyers¹. Three of those four, Vietnam, Bangladesh and Indonesia, also set India's tariff benchmark³. No shipment data here shows how much has moved.

What to change in the next 60 days

• Check the unit, not the group: reported closures are at the small end^1, 9, so ask for factory-level capacity and receivables.
• Put the duty assumption in writing: 10% today, possibly 18% after a deal^2, 3.
• Pre-qualify one alternate in Bangladesh, Vietnam, Indonesia or Cambodia, priced the same way^1, 3.
• Confirm reopening dates, and hold buffer stock in the diamond shapes and sizes you actually buy¹.

Watch whether the 10% levy moves, whether a deal lands after the mid-terms at or below 10%³, and whether the cotton waiver runs past December¹¹.